Number of the Month

June 2000

Sensitive and intelligent Americans (and contrary to some rumours on our side of the pond there are many of them) are bemused by the way that their great nation seems to be held in contempt by much of the rest of the world. There is a simple one-word answer – Hollywood. There was another furore in Britain about the way Tinsel Town rewrites history. This time it was the theft of the glory of the capture and decoding of Enigma (including the invention of the computer). With so many great achievements of their own why do they feel the need to pilfer the small ones of other nations? It was all nicely summarised in an article in the Sunday Times (June 4th 2000) by John Harlow and Nicholas Hellen. Coming soon we have Tom Cruise escaping from Colditz, but it all began with Errol Flynn (actually an Australian) conquering Burma single handed. A quotation from Los Angeles author Sheri Bearlstom says it all – "Your Lord Puttnam was right: it's up to you guys to make your version of history more interesting than our version of history. Otherwise you are going to lose – forever." Am I being naïf in thinking that a little word has got lost somewhere in there – TRUTH?

The British, of course, have nothing to complain about. They invented James Bond, an indestructible super-hero, Superman with the underpants on the inside. He was the fictional representative of a so-called Secret Service that yielded nothing to the Keystone Cops in the annals of incompetence.

What, you may ask, has all this to do with the question of wrong numbers and the abuse of measurement? The answer is almost everything. The inhabitants of that State of Insanity, California, have lived with fantasy for so long, that they are incapable of recognising reality when it hits them in the face. It is no coincidence that it was a "galaxy" of Hollywood stars, led by Jane Fonda, that forced through the notorious proposition 65, which declared no fewer that 216 chemicals to be human carcinogens and a further 15 to be reproductive toxins. Science, like history, has no immunity to the distortions of the new orthodoxy.

It was a splendid month for junk science. The University of Edinburgh "proved" that smoking causes meningitis. Are there any disease left that are not caused by tobacco? A Royal Commission gave its backing to the Global Warming scam, calling naturally for draconian taxes to be imposed. The Government welcomed the opportunity with open arms. The latest wonder drug breakthrough, CLA, will not only make you slim but it also prevents cancer (The Times June 20th).

It was also a great month for students of Government target practice, which is a potent source of silly numbers. The new craze among our bureaucratic masters is the setting of targets. The Treasury issues hundreds of them, which all the other bureaucrats have to chase and impose on the rest of us.

Petty bureaucrats have great bureaucrats upon their backs to bite 'em.
Great bureaucrats have greater bureaucrats,
And so ad infinitum.

One of the many targets in the news was for the reduction of exclusions in state schools. It had to be adhered to, regardless of the right or wrongs of particular cases. The little thugs who make daily life a nightmare for their teachers and fellow students soon caught on to their immunity and proceeded to do their worst. A particularly destructive target came from old Two-Jags, 43,000 houses to be built per year in the overcrowded south east of Britain. My village, which has had virtually the same population since the Domesday Book, is to have its housing increased by 20%. That is the beauty of macro-economics – you don’t have to worry about things like balance or culture. No doubt old 2J reaches for his revolver when he hears the word "culture".

 

The shock -horror headline that will appeal most to collectors of silly numbers, however, was in the Observer June 11th:

 

Britain shamed by child poverty

One in five is poor, reveals UN report

UK worse than Turkey and Poland

 Brown to act over damning figures

 

Now the official measure of poverty is half the median income or less. This means that if you double everyone's income, or even multiply it by ten, you still have the same number of poor. We can illustrate the absurdity of such a measure by means of a grossly over-simplified model.

Let us assume a rectangular distribution, i.e. there is the same number of people in each equal income range. For simplicity we make the range of incomes 100 units and assume a benefits threshold of 30 units. With these figures we get ten percent of the population as officially poor (see figure (a) left).

How can we correct this? Well, the obvious way is to give all the poor people enough money to raise them above the threshold. However, governments do not like to give away money, and in fact with this definition they do not have to. All that is required is to impose a Healey-type progressive taxation system so that everybody moves down the scale. We could, for example, make the distribution triangular, as in figure (b) below. The median is now 60.We have now eliminated the officially poor without having to give them anything.

 

 

 This, of course, is not a very efficient way of doing things. What you do to the high-income groups has no lowering effect on the median. The only way you can achieve this is by moving those above and close to the desired threshold to a position below it. Thus you simply confiscate the excess income of those who have the audacity to have middle incomes just above the threshold and are spoiling the figures. Hence you have the distribution in figure (c) below. The median is again 60 and the poverty threshold 30, so there are no official poor. You have done nothing to the rich, you have eliminated the poor without giving them anything, you have put the middle classes in their place and you have filled the Government coffers without alienating the rich donors with their fortunes cached overseas.

 

 

This last figure is, naturally, absurd and impractical, but it powerfully illustrates how a silly measure can influence policy. With a definition based on the median, of course, the shape of the two blocks is immaterial; all that is required is that they are of equal area. The rich can earn as much as they like, as long as the middle income groups are kept in their place. It would be an interesting exercise to correlate official poverty statistics with the national policies of taxation of middle incomes.

 

 

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